NAME CHANGE CAN'T HIDE FRAUD
A Travis County District Court found that a Houston company changed its name several times while trying to avoid prosecution for premium fraud, according to Texas Mutual Insurance Company. A.C. Lath & Plastering Inc., owned and operated by Martin Geserick and Kevin Ball of Houston, was directed to pay $450,000 in restitution to Texas Mutual as part of a plea bargain agreement. The prosecution contended that Geserick and Ball transferred employees from one company to another and deliberately misrepresented its payroll to Texas Mutual in order to gain workers' compensation coverage at a lower premium. The company originally applied for workers' compensation coverage under the name Atlantic Partners L&P Trust. In subsequent years, Geserick and Ball changed the company name to Atlantic Partners, then to Atlantic Contractors Inc. When Texas Mutual auditors attempted to review the companies' payrolls, Geserick and Ball refused to provide the necessary records. Texas Mutual investigator Marti Rickard ultimately discovered two other companies, Stone Cast Inc. and A.C. Lath & Plastering Inc., during her investigation. The evidence suggested that Geserick and Ball were trying to develop other entities to avoid prosecution of premium fraud. Rickard credits the "excellent work of the Travis County DA's office" for securing the restitution. Travis County Assistant District Attorney Donna Crosby handled the prosecution.
RATE HIKES EXPECTED
Multiple rate hike requests from insurers and consumer concerns prompted Louisiana Governor Mike Foster to hire an advisor to assist him and the Louisiana Insurance Rating Commission (LIRC) in considering the rate requests. The New Orleans Times-Picayune reported that Foster expects even more efforts by insurance companies to raise rates. Foster's office will pay Chris Faser, formerly with the state insurance department, a salary of $49,900 to help determine which rate hikes are acceptable. Faser's contract lasts through June 30, 2003. The LIRC recently postponed a decision on a 16 to 21 percent auto insurance rate hike requested by State Farm. That company placed a moratorium on new auto policies in Louisiana, contending it has lost $300 million in that state over the past two years. Foster expects carriers to raise rates to make up for investment losses and costlier reinsurance.
INSURBANC EXPANDING
InsurBanc, the federal savings bank developed by the Independent Insurance Agents & Brokers of America (IIABA) to serve agents and brokers, and their clients, won regulatory approval to expand its operations to 15 additional states—three on a full-service basis and 12 on a limited-service capacity. According to bank CEO Michael Herlihy, the Office of Thrift Supervision (OTS) approved this expansion of services along with a new online agent education program for agents. W.R. Berkley Corporation is a partner in the bank. InsurBanc is now authorized to offer full commercial and consumer banking services to agencies and agency employees in Maine, Rhode Island and Delaware. In addition, InsurBanc-trained agents can make referrals for commercial and consumer banking products. This is the same authority the bank already has in the three states—Connecticut, Massachusetts and New Jersey—where it was permitted to do business upon approval of its charter by the OTS in April 2001. InsurBanc also is granted limited-service authority in a dozen states—Kentucky, Illinois, Iowa, Indiana, Louisiana, Missouri, Minnesota, Nebraska, South Carolina, Oklahoma, Oregon and Virginia. Limited-service authority enables the bank to provide full commercial and consumer banking services to agencies and agency employees as well as pay referral fees to agents for the origination of credit card applications and settlement fees for residential mortgages. The OTS also approved the bank's online agent education program. Called the InsurBanc Independent Agent Education Program, this online educational tool will allow agents and brokers to use the Internet to complete the training required for them to be qualified to refer business to the bank. Previously, InsurBanc staff conducted training sessions in person. The new Internet-based educational program uses technology made available through the Big "I" Virtual University.
SERVING UP A CURE
Gary Fate and Sharla Martin of Hull & Company General Agency in Dallas are once again heading up the organization of 7UP's Serving Up A Cure Celebrity Waiter Dinner, benefiting the Duchenne Dystrophy research efforts of the Muscular Dystrophy Association. Fate is the Chairman for this year's dinner and Martin is once again serving as his right hand assistant. The two were active in last year's dinner as well. This year's event will be the fourth annual celebrity waiter dinner. It is MDA's most successful social event in the Dallas-Fort Worth area and brought in more than $285,000 in donations in 2001. It will be held at the Dallas Infomart on Nov. 9. A cocktail reception, silent and live auctions, and an elegant seated dinner will be highlights of the star-studded evening. Celebrity waiters participating in last year's dinner included former Miami Dolphin Lyle Blackwood, former Dallas Cowboy John Fitzgerald, Congressman Pete Sessions, NBC 5's Chief Meteorologist David Finfrock and Anchor Mike Snyder, KSCS Radio's Terry Dorsey and many other Dallas broadcast personalities. To learn more about the event, please contact Anita Stevenson, MDA, (972) 480-0070.
AMERICAN NAT'L PROFITS JUMP
Texas-based American National Insurance Company reported its gain from operations after tax for the second quarter of 2002 was $27,565,000 ($1.04 per share) versus $16,116,000 ($0.61 per share) for the same period in 2001, a 71 percent increase. For the first six months of 2002, the gain from operations after tax was $64,122,000 ($2.42 per share) versus $50,282,000 ($1.90 per share) for the same period in 2001. The company attributed the improved gain from operations to significant improvements in the Multiple Line Property and Casualty operations, which were near break even year-to-date, and the Health Division, which contributed significantly to the year-to-date gain from operations before tax. Net income for the six months ended June 30 however was down, coming in at $63,127,000 ($2.38 per share) versus $78,123,000 ($2.95 per share) for the same period in 2001. The decrease was due to realized losses on investments, including other-than-temporary impairment write-downs. Earned premiums for the first six months of 2002 were 23.1 percent ahead of the same period for 2001 and total revenues for the first six months of 2002 were 12.6 percent ahead 2001 figures.
AAI, IIABA LIKE MED-MAL PLAN
President Bush's proposal for major legislative reforms to address the medical malpractice liability crisis has been praised by both the Alliance of American Insurers and the IIABA. In a recent speech in North Carolina, Bush proposed a number of reforms including a $250,000 cap on non-economic or punitive damages in medical malpractice lawsuits. Robert A. Rusbuldt, CEO of the IIABA praised Bush for his leadership and echoed the call for passage of medical malpractice reform. He stated that without reform litigation will continue to spiral out of control, forcing more doctors to close practices or move to states with less-hostile, medical-legal environments and leaving people without access to quality health care. Kenneth Schloman, Alliance counsel, said Bush's proposal is a "common sense solution to a problem that has resulted in higher medical prices and less choice for Americans and shows that the "Administration is clearly interested in making health care more affordable, more available and safer for patients." He added that Bush's plan is "very similar to the Health Efficient, Accessible, Low Cost, Timely Health Care (HEALTH) Act of 2002, HR 4600, introduced by Rep. Jim Greenwood (R-PA) and currently being considered by the House Judiciary Committee." The White House contends that the plan could save the federal government $30 billion per year in health costs and could reduce such costs for all Americans by $60 billion a year or more. In addition to a cap on punitive damages, Bush proposed litigation reform that would make it easier for doctors and hospitals to share information about mistakes while protecting those discussions from discovery in malpractice lawsuits.
TWCC LAUNCHES ONLINE SYSTEM
The Texas Workers' Compensation Commission (TWCC) unveiled a new online tool, the Online Occupational Injury Custom Reports System. The Web-enabled database system allows safety and health professionals, insurance carriers, and other individuals to query occupational injury information from the agency's Web site. The user can query three separate databases: workers' compensation claims data; injury rates from a statewide survey; and occupational fatalities. Workers' compensation claims data is based on injuries reported by covered employers and does not contain any confidential claim file information. The injury rates are from a statewide survey of both covered and non-covered employers. The occupational fatalities information is based on news clips and death certificates. Because the information in these databases and TWCC generated reports are compiled from different sources, the results reflected in reports may vary. After choosing a database, the user can then choose up to 20 criteria for detailed data reports. After a database and criteria is selected, the user will automatically receive a custom report, which provides results in tabular and graphical format, as well as raw data files that can be downloaded to a spreadsheet. Reports provide overall totals and demographic analysis. Median and mean medical and income cost data is provided for workers' compensation claims data. The system's help links provide detailed instructions to enable the user to navigate the screens, understand the reports, and get the most out of the system. The TWCC Occupational Injury Reports System can be found on the agency's Web site at: http://www.twcc.state.tx.us/rss/twcc/ hsdata_select.html.
ISO FIRE DATABASE APPROVED
With Maine on board, insurance regulators in 44 states and Washington, D.C., have approved Insurance Services Office Inc.'s (ISO) LOCATION™ database of Public Protection Classifications (PPC™), the ISO program that grades the fire-suppression capabilities of more than 45,000 municipalities in the U.S. This represents all jurisdictions in which ISO conducts public protection gradings of fire-protection areas. The LOCATION includes street addresses of residential and commercial properties throughout the U.S. Insurers use the PPC program to evaluate communities' fire-suppression capabilities—a key criterion in pricing property insurance coverage. LOCATION's address-specific database provides insurers updated protection-class, postal and road data every month on CD-ROM. In the six independent-bureau states—Hawaii, Idaho, Louisiana, Mississippi, North Carolina and Washington—insurers can opt to file the database for regulators' approval to assign PPC information to individual risks. ISO can also help insurers file the database in those states.
NAME CHANGE CAN'T HIDE FRAUD
A Travis County District Court found that a Houston company changed its name several times while trying to avoid prosecution for premium fraud, according to Texas Mutual Insurance Company. A.C. Lath & Plastering Inc., owned and operated by Martin Geserick and Kevin Ball of Houston, was directed to pay $450,000 in restitution to Texas Mutual as part of a plea bargain agreement. The prosecution contended that Geserick and Ball transferred employees from one company to another and deliberately misrepresented its payroll to Texas Mutual in order to gain workers' compensation coverage at a lower premium. The company originally applied for workers' compensation coverage under the name Atlantic Partners L&P Trust. In subsequent years, Geserick and Ball changed the company name to Atlantic Partners, then to Atlantic Contractors Inc. When Texas Mutual auditors attempted to review the companies' payrolls, Geserick and Ball refused to provide the necessary records. Texas Mutual investigator Marti Rickard ultimately discovered two other companies, Stone Cast Inc. and A.C. Lath & Plastering Inc., during her investigation. The evidence suggested that Geserick and Ball were trying to develop other entities to avoid prosecution of premium fraud. Rickard credits the "excellent work of the Travis County DA's office" for securing the restitution. Travis County Assistant District Attorney Donna Crosby handled the prosecution.
RATE HIKES EXPECTED
Multiple rate hike requests from insurers and consumer concerns prompted Louisiana Governor Mike Foster to hire an advisor to assist him and the Louisiana Insurance Rating Commission (LIRC) in considering the rate requests. The New Orleans Times-Picayune reported that Foster expects even more efforts by insurance companies to raise rates. Foster's office will pay Chris Faser, formerly with the state insurance department, a salary of $49,900 to help determine which rate hikes are acceptable. Faser's contract lasts through June 30, 2003. The LIRC recently postponed a decision on a 16 to 21 percent auto insurance rate hike requested by State Farm. That company placed a moratorium on new auto policies in Louisiana, contending it has lost $300 million in that state over the past two years. Foster expects carriers to raise rates to make up for investment losses and costlier reinsurance.
INSURBANC EXPANDING
InsurBanc, the federal savings bank developed by the Independent Insurance Agents & Brokers of America (IIABA) to serve agents and brokers, and their clients, won regulatory approval to expand its operations to 15 additional states—three on a full-service basis and 12 on a limited-service capacity. According to bank CEO Michael Herlihy, the Office of Thrift Supervision (OTS) approved this expansion of services along with a new online agent education program for agents. W.R. Berkley Corporation is a partner in the bank. InsurBanc is now authorized to offer full commercial and consumer banking services to agencies and agency employees in Maine, Rhode Island and Delaware. In addition, InsurBanc-trained agents can make referrals for commercial and consumer banking products. This is the same authority the bank already has in the three states—Connecticut, Massachusetts and New Jersey—where it was permitted to do business upon approval of its charter by the OTS in April 2001. InsurBanc also is granted limited-service authority in a dozen states—Kentucky, Illinois, Iowa, Indiana, Louisiana, Missouri, Minnesota, Nebraska, South Carolina, Oklahoma, Oregon and Virginia. Limited-service authority enables the bank to provide full commercial and consumer banking services to agencies and agency employees as well as pay referral fees to agents for the origination of credit card applications and settlement fees for residential mortgages. The OTS also approved the bank's online agent education program. Called the InsurBanc Independent Agent Education Program, this online educational tool will allow agents and brokers to use the Internet to complete the training required for them to be qualified to refer business to the bank. Previously, InsurBanc staff conducted training sessions in person. The new Internet-based educational program uses technology made available through the Big "I" Virtual University.
SERVING UP A CURE
Gary Fate and Sharla Martin of Hull & Company General Agency in Dallas are once again heading up the organization of 7UP's Serving Up A Cure Celebrity Waiter Dinner, benefiting the Duchenne Dystrophy research efforts of the Muscular Dystrophy Association. Fate is the Chairman for this year's dinner and Martin is once again serving as his right hand assistant. The two were active in last year's dinner as well. This year's event will be the fourth annual celebrity waiter dinner. It is MDA's most successful social event in the Dallas-Fort Worth area and brought in more than $285,000 in donations in 2001. It will be held at the Dallas Infomart on Nov. 9. A cocktail reception, silent and live auctions, and an elegant seated dinner will be highlights of the star-studded evening. Celebrity waiters participating in last year's dinner included former Miami Dolphin Lyle Blackwood, former Dallas Cowboy John Fitzgerald, Congressman Pete Sessions, NBC 5's Chief Meteorologist David Finfrock and Anchor Mike Snyder, KSCS Radio's Terry Dorsey and many other Dallas broadcast personalities. To learn more about the event, please contact Anita Stevenson, MDA, (972) 480-0070.
AMERICAN NAT'L PROFITS JUMP
Texas-based American National Insurance Company reported its gain from operations after tax for the second quarter of 2002 was $27,565,000 ($1.04 per share) versus $16,116,000 ($0.61 per share) for the same period in 2001, a 71 percent increase. For the first six months of 2002, the gain from operations after tax was $64,122,000 ($2.42 per share) versus $50,282,000 ($1.90 per share) for the same period in 2001. The company attributed the improved gain from operations to significant improvements in the Multiple Line Property and Casualty operations, which were near break even year-to-date, and the Health Division, which contributed significantly to the year-to-date gain from operations before tax. Net income for the six months ended June 30 however was down, coming in at $63,127,000 ($2.38 per share) versus $78,123,000 ($2.95 per share) for the same period in 2001. The decrease was due to realized losses on investments, including other-than-temporary impairment write-downs. Earned premiums for the first six months of 2002 were 23.1 percent ahead of the same period for 2001 and total revenues for the first six months of 2002 were 12.6 percent ahead 2001 figures.
AAI, IIABA LIKE MED-MAL PLAN
President Bush's proposal for major legislative reforms to address the medical malpractice liability crisis has been praised by both the Alliance of American Insurers and the IIABA. In a recent speech in North Carolina, Bush proposed a number of reforms including a $250,000 cap on non-economic or punitive damages in medical malpractice lawsuits. Robert A. Rusbuldt, CEO of the IIABA praised Bush for his leadership and echoed the call for passage of medical malpractice reform. He stated that without reform litigation will continue to spiral out of control, forcing more doctors to close practices or move to states with less-hostile, medical-legal environments and leaving people without access to quality health care. Kenneth Schloman, Alliance counsel, said Bush's proposal is a "common sense solution to a problem that has resulted in higher medical prices and less choice for Americans and shows that the "Administration is clearly interested in making health care more affordable, more available and safer for patients." He added that Bush's plan is "very similar to the Health Efficient, Accessible, Low Cost, Timely Health Care (HEALTH) Act of 2002, HR 4600, introduced by Rep. Jim Greenwood (R-PA) and currently being considered by the House Judiciary Committee." The White House contends that the plan could save the federal government $30 billion per year in health costs and could reduce such costs for all Americans by $60 billion a year or more. In addition to a cap on punitive damages, Bush proposed litigation reform that would make it easier for doctors and hospitals to share information about mistakes while protecting those discussions from discovery in malpractice lawsuits.
TWCC LAUNCHES ONLINE SYSTEM
The Texas Workers' Compensation Commission (TWCC) unveiled a new online tool, the Online Occupational Injury Custom Reports System. The Web-enabled database system allows safety and health professionals, insurance carriers, and other individuals to query occupational injury information from the agency's Web site. The user can query three separate databases: workers' compensation claims data; injury rates from a statewide survey; and occupational fatalities. Workers' compensation claims data is based on injuries reported by covered employers and does not contain any confidential claim file information. The injury rates are from a statewide survey of both covered and non-covered employers. The occupational fatalities information is based on news clips and death certificates. Because the information in these databases and TWCC generated reports are compiled from different sources, the results reflected in reports may vary. After choosing a database, the user can then choose up to 20 criteria for detailed data reports. After a database and criteria is selected, the user will automatically receive a custom report, which provides results in tabular and graphical format, as well as raw data files that can be downloaded to a spreadsheet. Reports provide overall totals and demographic analysis. Median and mean medical and income cost data is provided for workers' compensation claims data. The system's help links provide detailed instructions to enable the user to navigate the screens, understand the reports, and get the most out of the system. The TWCC Occupational Injury Reports System can be found on the agency's Web site at: http://www.twcc.state.tx.us/rss/twcc/ hsdata_select.html.
ISO FIRE DATABASE APPROVED
With Maine on board, insurance regulators in 44 states and Washington, D.C., have approved Insurance Services Office Inc.'s (ISO) LOCATION™ database of Public Protection Classifications (PPC™), the ISO program that grades the fire-suppression capabilities of more than 45,000 municipalities in the U.S. This represents all jurisdictions in which ISO conducts public protection gradings of fire-protection areas. The LOCATION includes street addresses of residential and commercial properties throughout the U.S. Insurers use the PPC program to evaluate communities' fire-suppression capabilities—a key criterion in pricing property insurance coverage. LOCATION's address-specific database provides insurers updated protection-class, postal and road data every month on CD-ROM. In the six independent-bureau states—Hawaii, Idaho, Louisiana, Mississippi, North Carolina and Washington—insurers can opt to file the database for regulators' approval to assign PPC information to individual risks. ISO can also help insurers file the database in those states.
